LOI Terms & Timelines?

[Mallikarjun Reddy Pateel]

Hello Investors, 

I'm currently working as GP in my First deal(MFH 10+). Identified Couple of Properties, seeking Guidance in terms of submitting LOI.

1. if I'm being GP do we put Business entity as Buyer?

2. what's the typical closing timeline you guys use?

3. how does DD timeline looks like? (2-3 weeks?)

4. any tips to submit an LOI that Looks attractive to seller?

Appreciate any comments on this matter!!  Happy Labor day !!

[Charles Seaman]

@Mallikarjun Reddy Pateel my replies are below.

1. There's a good chance that you'll form a single-purpose entity to buy the property. This entity typically will be formed after your LOI is accepted, so you should submit the LOI on the letterhead of whichever entity you use to build your business with.

2.  90 days.  We typically shoot for a 30-day due diligence period, a 30-day closing period thereafter, and a 30-day extension period if needed.

3.  30 days.  If you're willing to go with a shorter due diligence period, then that's even more favorable.

4. Other than price, the two other factors that make LOI's more attractive to sellers are nonrefundable EMD and shorter due diligence periods.